Administration Seeks Increase in Oversight is an interesting NY Times article from March 22, 2009. It is about the fact that the Obama Adminstration is seeking additional oversight with respect to Executive Pay at financial institutions. The article is abit vague about what exactly the Administration is interested in. As the article states:

The administration has been considering increased oversight of
executive pay for some time, but the issue was heightened in recent
days as public fury over bonuses spilled into the regulatory effort.

The officials said that the administration was still debating the
details of its plan, including how broadly it should be applied and how
far it could go beyond simple reporting requirements. Depending on the
outcome of the discussions, the administration could seek to put the
changes into effect through regulations rather than through
legislation.

One proposal could impose greater requirements on company boards to
tie executive compensation more closely to corporate performance and to
take other steps to ensure that compensation was aligned with the
financial interest of the company.

The new rules will cover all financial institutions, including those
not now covered by any pay rules because they are not receiving federal
bailout money. Officials say the rules could also be applied more
broadly to publicly traded companies, which already report about some
executive pay practices to the Securities and Exchange Commission.

I am afraid that this might be an overreachtion to the AIG bonus mess. Freedom of contract is an essential part of labor and employment law-indeed most of law. The government does not need to get involved in any perhaps the most extreme situations as when it is giving a company bailout money. Lets not overreact.

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Comments

Obama and the Dems are just warming up so they can pass the much-dreamed-of Maximum Pay Act, making it illegal to earn more than 40 times the minimum wage. Legislators and their cronies excluded, of course.